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Another inversion today
Old 01-18-2006, 07:37 AM   #1
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Another inversion today

Kids, the economy is not flashing a green light. I see yellow at best.

It is not time to panic (it never is), but make sure you really are comfy with the potential risk in your portfolio. You might also consider putting 1% of the total into puts sometime in the next 3 to 4 months.
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Re: Another inversion today
Old 01-18-2006, 08:29 AM   #2
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Re: Another inversion today

Tokyo's market meltdown certainly hasn't given me the warm fuzzies either....
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Re: Another inversion today
Old 01-18-2006, 08:47 AM   #3
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Re: Another inversion today

Probably due to the fleeing into Treasuries from the Tokyo market, I read that Treasuries were up (down) due to that.

Good thing I went to 100% Bonds/Cash recently. The source of this drop is unexpected, but then maybe not, when you're on a precipice, everwhere you look is down ...
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Re: Another inversion today
Old 01-18-2006, 08:54 AM   #4
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Re: Another inversion today

Guy on Bloomberg (some investment advisor...yeah...I know) yesterday claimed that stocks are the most undervalued they've been in the history of the universe.
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Re: Another inversion today
Old 01-18-2006, 09:00 AM   #5
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Re: Another inversion today

I am very curious to see how this is going to play out. We are living on some very strange times right now. Some alarmists claim that we have a perfect storm brewing (crash of 29, World War I & World War II kind of event) while other say that what we are seeing are just some normal turbulence and that everything will be business as usual and History is over (the Fukuyama types). I am certainly not smart enough to to be certain on either outlook. I guess my best option here is to sit back, relax, open the bag of popcorn and watch the bloodbath until it ends. That is the good thing about being debt free and have some cash stacked: You have the confort of not having to worry as much as the guys with car and credit card payments when the crap hits the fan.
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Re: Another inversion today
Old 01-18-2006, 09:01 AM   #6
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Re: Another inversion today

"Guy on Bloomberg (some investment advisor...yeah...I know) yesterday claimed that stocks are the most undervalued they've been in the history of the universe."

lol ... natch, I betcha he said the same about dot comes in 2000. I'll take Buffet, Greenspan and Shilling (well maybe not Greenspan) over a talking head anyday ...
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Re: Another inversion today
Old 01-18-2006, 09:04 AM   #7
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Re: Another inversion today

I suppose I should have noted that I took his comments with a grain of salt.

Main point being its not hard to find someone at every end of the spectrum and everywhere in between...

I think the only way to manage in a world where one guy is screaming that the sky is falling while another is singing "its coming up roses" is to plug your ears. Maybe click your ruby slippers together three times and think "theres no place like a well diversified portfolio". Then consider a while why the heck you're wearing ruby slippers. I mean...where the hell would you go to even buy ruby slippers?
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Re: Another inversion today
Old 01-18-2006, 09:04 AM   #8
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Re: Another inversion today

Quote:
Originally Posted by ()
Guy on Bloomberg (some investment advisor...yeah...I know) yesterday claimed that stocks are the most undervalued they've been in the history of the universe.
Wasn't he the guy who wrote the book "Dow 36000" back in 1999?
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Re: Another inversion today
Old 01-18-2006, 09:07 AM   #9
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Re: Another inversion today

Quote:
Originally Posted by camberiu
Wasn't he the guy who wrote the book "Dow 36000" back in 1999?*
I heard those guys recanted ...
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Re: Another inversion today
Old 01-18-2006, 09:13 AM   #10
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Re: Another inversion today

Might have been. Couple that with Bill Gross's "Dow 5000" and you get...what...Dow 15,500?

You can see me on Bloomberg sometime next month hawking my new book "Split the difference: make millions on our sure-thing Dow 15,500 projections!". Really rolls off the tongue, doesnt it?
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Re: Another inversion today
Old 01-18-2006, 09:20 AM   #11
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Re: Another inversion today

Well

There is always some version of Bogle's "---just stand there." one could vary.

I still like:

PSSST: Wellesley!

heh heh heh heh

Rats! Talked to my buddy in CO the other day - the suburbs are growing away from our gold mine (non working) and the price of gold hasn't stirred any interest in reopening given govt. safety regs. May have to polish up what's left of the gold, silver, and platinium coins in the old safety deposit box - if I get back to LA to close it out this year. Not looking forward to replay of the 70's and early 80's - been there, done that.

heh heh
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Re: Another inversion today
Old 01-18-2006, 09:26 AM   #12
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Re: Another inversion today

Yep, Wellesley's yield has been looking pretty sweet lately, arent the admiral shares running close to 4.25%?

I'd still be knee deep in it if I was still single or my wife was ER'ed.

Charlie's call to go with Windsor II was spot on. Between his advice on buying REITS and that call, I think he made me an extra mid-five figures amount. Maybe I should send him an advisory fee or something

Gotta love those dividend paying stocks. Even if the **** hits the fan, just hang in there, take your 2.5-3%, and wait for the shooting to stop.
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Re: Another inversion today
Old 01-18-2006, 10:17 AM   #13
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Re: Another inversion today

I have a question.

Each of my teenage boys (18 and 19) had a Roth IRA. One is invested in VG 500 Index, the other in Total Stock Market Index. I have been thinking of changing the 500 Index to Total stock mkt, is now a good time? Or is it really a non issue and they are comparable?
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Re: Another inversion today
Old 01-18-2006, 10:26 AM   #14
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Re: Another inversion today

Quote:
Originally Posted by ()
I think the only way to manage in a world where one guy is screaming that the sky is falling while another is singing "its coming up roses" is to plug your ears.
Surely each of them wants to buy or sell something to the other.

There has to be a way to carve a middleman's fee out of this!
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Re: Another inversion today
Old 01-18-2006, 10:30 AM   #15
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Re: Another inversion today

Quote:
Originally Posted by ()
I suppose I should have noted that I took his comments with a grain of salt.

Then consider a while why the heck you're wearing ruby slippers. I mean...where the hell would you go to even buy ruby slippers?
ebay?

http://search.ebay.com/search/search.dll?cgiurl=[...]

MODERATOR EDIT: Shortened displayed link. -BMJ
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Re: Another inversion today
Old 01-18-2006, 10:45 AM   #16
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Re: Another inversion today

Quote:
Originally Posted by KB
I have a question.

Each of my teenage boys (18 and 19) had a Roth IRA.* One is invested in VG 500 Index, the other in Total Stock Market Index.* I have been thinking of changing the 500 Index to Total stock mkt, is now a good time?* Or is it really a non issue and they are comparable?*
As I understand it, the TSMI fund is more inclusive of mid and small caps, but the funds are so tightly correlated that it makes little difference which you pick.

Just a thought: why not involve the boys in the decision?
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Re: Another inversion today
Old 01-18-2006, 12:59 PM   #17
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Re: Another inversion today

Ruby slippers on ebay. Oh for the love of god... :P

TSMI is heavily similar to the S&P500 index. Its a market weighted index (by necessity) so holds very little small caps as a total percentage and not a lot more mid cap. Usually the expense ratio is higher than the bare s&p500 index, I think over the long haul the returns are slightly lower, and the volatility is slightly lower.

For someone with 20+ years, either is ok. I'd probably stick with the s&p 500.

Nords...the middleman is already there. The guy crying about the sky falling wants to sell everything and get into cash and bonds. The other guy is buying everything. The broker is making brokerage fees.
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Re: Another inversion today
Old 01-18-2006, 01:15 PM   #18
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Re: Another inversion today

Quote:
Each of my teenage boys (18 and 19) had a Roth IRA. One is invested in VG 500 Index, the other in Total Stock Market Index. I have been thinking of changing the 500 Index to Total stock mkt, is now a good time? Or is it really a non issue and they are comparable?
Not an issue to me but if I had to pick between the 2 I would take the Total. Total should outperform the S&P over time due to the very small weight given to mid/small caps but again the small gains will be negligible. Maybe you will or they will decide to slice and dice a bit more later but until then I don't see it as a necessary change and if you were to change I doubt the timing of it would be a matter of importance.
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Re: Another inversion today
Old 01-18-2006, 01:29 PM   #19
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Re: Another inversion today

Quote:
Originally Posted by Nords
Surely each of them wants to buy or sell something to the other.*

There has to be a way to carve a middleman's fee out of this!
ROFLMAO
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Re: Another inversion today
Old 01-18-2006, 02:33 PM   #20
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Re: Another inversion today

Quote:
Originally Posted by wildcat
Total should outperform the S&P over time
I'll have to go back and look again, but last time I checked, the tsm had outdone the s&p500 for periods under 5 years, but in the 10, 20 and over year ranges, the s&p had slightly outdone the tsm. In the few months since i ran it, I doubt the 10+ year charts have changed much. Not sure if its long term large cap performance, smaller expenses, higher dividends or some combination.

Checked again...its a pisser to get a charting product to give you good long term data, but it does look like the S&P500 index outperformed TSM. Bigcharts gave me the best data set going back the furthest. The TSM did catch up for the most part recently in total returns over 20 years.

By the way, I own both...along with a lot of other stuff...
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